Nearly £5bn online revenue

Online and mobile advertising reached a new high of nearly £5bn last year, helped by a massive increase in video and social media adverts.

Internet advertising leapt by 14.4% in 2011, to reach £4.8bn - a £687m rise on the previous year, according to the report from the Internet Advertising Bureau UK (IAB), conducted by PricewaterhouseCoopers.

It was the biggest increase in internet advertising in five years.

Video advertising saw particularly strong growth and now accounts for 10% of all online display advertising.

Expenditure on online video doubled to £109m in 2011, up from £54m the previous year.

The format has grown more than eight-fold since 2008, when video spend was £12m.

It reflects increasing numbers of people watching TV online, with 27.3 million of the 38.5 million people who went online in the UK on their PC in February viewing streamed content.

The popularity of social media networks drove a 75% increase in banner ads on platforms such as Facebook, YouTube and LinkedIn, to reach £240m last year, also an eight-fold increase since records began in 2008.

Social networks accounted for 27% of all the time spent online in the UK in 2011.

Advertising on mobile devices also leapt last year, by 157% to reach a new high of £203m.

This increase was driven by the increased popularity of smartphones and tablets, such as the iPhone and iPad, new touchscreen technology and 3G.

Tim Elkington, director of research and strategy at the IAB, said: "Online and mobile advertising have experienced staggering growth since this study began in1997.

"Advertisers increasingly recognise the central role that online plays in their marketing campaigns."

By sector, finance spent the most on display advertising, ahead of fast-moving consumer goods and then retail.

This was followed by entertainment and the media, then technology.